tv On the Move Bloomberg August 7, 2015 3:00am-4:01am EDT
not just that, we break down that not so super thursday. futures unchanged, and tax futures lower -- dax futures lower. caroline: we are expecting a flat open. all eyes on the u.s.. 225,000 are how many jobs are expected to be added. this is why we see the emerging markets selloff. could increasey their rates. until 1:30 and see p.m. -- we did a disappointing numbers coming out of germany.
this affects the euro, we saw it to do below are on the -- dip lower on the back of those numbers. we are trading flat now. let's have a look at how the dollar is trading, what everyone cause the most important these of data in the world of economics. we have a strengthening of the u.s. dollar in anticipation of september is the month interest rates will raise. let's have a little look at how costs are faring ahead of u.s. yields rising? just a touch. meanwhile, money flowing into spain, italy, and germany. pretty much a flat morning when you look across the assets, can see any wild moves. let's see if we can do better in terms of equity.
and all little scattering of numbers, we broke it down down by 1%. estimates.lysts still net there are .utflows seeping out hepoke with the cfo and said this is no longer the effect, this is a readjustment of portfolios. this is the biggest asset manager in europe. they managed to see it in flow but not what came out of pemco. this is largely held by the irish government, but there are still a few shares to trade. up 3.5% overall. this is a company that posted a
tripling in its first half. today's the day we don't see it, loans improving in the irish economy growing. the chief executive said we are ready now to push for a stock sale. up by 4.4%.elecom thatt 400 million euros, means it sees that profit just a smidgen overall this is a company facing hurdles and antitrust issues. jonathan: thank you very much. by .2%.n let's get the asian market rapid david inglis. david: yep, a very good afternoon from here in hong kong. let me get her some breaking news, this concerns toshiba.
from the be removed topics 400 index. markets in tokyo are already closed, certainly something to watch when they start trading on monday. the company has also to challenges between accounting investigations and changes within the culture itself. watch out for that. .01%,erything together, that is the move on the regional benchmark. i will be waiting for the number, but that being said, if you were to take of some of look big moves -- take a towhat is happening, down
resume trading today. it was halted following the chair sale. expectations that a lot of these banks may have to raise more money in light of that share system. the shanghai composite closing up shop right now. it looks like a big move, not in the interest of shanghai will stop but still a good day there. there are expectations that we will see state support. what i mean is sources have told csrc has that the resumed viewing these private places that were put on halt because of all the chaos of the past few weeks. equity markets are thin, yields are mixed, currencies stressed. just waiting to see
what the jobs report will look like. jonathan: aren't we all. that is the situation for most of asia. let's get specific and talk japan. the governor is giving his press conference as i speak. the central bank kept its asset purchase program's unchanged. brian, an update on the policy today on the outlook. advocate japanese inflation in the various readings, we pretty much are nowhere near that target. brian: that is exactly right. the main take away is that mr. kuroda is standing by his forecast. and he is standing pat policy. if you look at the market, some as flattening, so they're
betting on more stimulus sometime in the next few months. we talked of economists, and more than half the people we talked to said they expect an expansion of stimulus maybe in october. october 30 is the key many are looking at. others say it will not happen until january of next year. will haveaid the doj to acty again to get near that target. jonathan: is getting wages to go higher what the problem is? a great story on bloomberg.com that the oil price is $15 a barrel below the bank of japan's target. they have that problem, so does the bank of america -- bank of the u.k. and the fed. an: energy prices are
definitely part of the problem, but corporate sentiment is also part of the problem. mr. kuroda is giving his virtuous cycle story, one he is to behind for quite a while. saying that tightness in the labor market will lead to wage increases which should lead to spending. but corporate earnings have been strong for the last 2.5 years. it is not happened yet. if it hasn't happened over the last 2.5 years, why will it happen in the next 6-12 months? many think it won't. the reason is that japanese companies facing demographic challenges they will not be able to overcome and sibley do not believe we will reach 2% inflation anytime in the next three or four years. jonathan: just quickly, we have been stuck in the same dollar/yen range for the last couple of months. are they satisfied with the
range we're in? brian: my sense is that they are. that is a perfect level. they will not say that on the record, but we talked to people and politicians or bureaucrats, they all seem to think that the dollar doesn't need to strengthen. one of the big questions is when the fed starts hiking rates, won't that push the dollar up again? people have told us there is no reason for that to happen, that means that is what they hope. jonathan: that is the situation in japan. let's get to the big one, it is jobs day in the u.s. the fed's first interest rate hike since 2006 potentially as
early as next month. estimates are that added 225,000 last month. to break down the significance, i am very please to say we are joined be a -- by a global market strategist from jpmorgan. great happy with us. anastasia, you're coming from the states. is this a jobs report that will make me hike rates? anastasia: what you're looking for is not the number, but what that number is doing. if you think about what the number has to be to weaken the trend, it would have to be exceptionally low. if you get something around 185,000, you will now change the trend. year to date trend will study about 200,000 jobs.
that is meaningful, that is what the fed is looking for. it is about the trend. jonathan: is it the same for you, matt? jobs arethink interesting because they are interesting. i can't see the data they really changing the direction of where they are going. clearly we know the fed is focused on that. .s. consumer is not spending as much as it was. the windfall from lower oil seems to have gone elsewhere, mainly towards health care spending it seems. therefore, it is a forward-looking indicator perhaps of consumption trends. jonathan: anastasia, we were in the city of london and told to be excited about super thursday. atng forward, we look
september and look at the bank of england we were going to be excited for a hike but nothing happened. anastasia: i am in the september camp. each data point we get gets us closer to that. there was one interesting thing that we got last week, it was not what it mentioned but what it did not. it was because and retail sales -- it did not mention the pmis that came off. what that tells me is the fed is willing to look through the recent weakness and focus on that trend. jonathan: the other side is that also tells me there willing to look at bad news because they want to move for the sick of moving. it seems like a juvenile argument. do you think there is an argument just to get off the zero? if you listen to what
they're talking about, he seems pretty dogmatic about the need to raise rates. look at the data using the break evens, it is coming down. there was less inflation in the fed was expecting just two or three months ago. phenomenon, with all these lower commodity prices rippling through the global economy, there could be an argument for a fake. does it mean that won't happen? this nervousness will keep people like us busy, and keep markets nervous. anastasia: i think we saw some reassurance in the bank of england yesterday. you can carry that to be as well. one of the arguments they're having is do we hike earlier in
the have a gentle path, or do we wait? then we have to be behind the curve. what you saw from the boe is that they are favoring the former, hiking sooner rather than later but having a gentle half. as we talk of -- path. as we talk abou this, this is a good thing for fixed income. jonathan: we talk about the same thing 12 months ago, go early. apparently vassilis some time. -- we still have some time. matt: this could be very important. are introducing some two-way risk here. it has been a tremendous monetary period.
we arel this talk, forced to think about the two-way risks now. they may not have our back. the risk premium you want to put on all assets, this is what central banks want as well. it wants to temper down these spirits rising. jonathan: a market with two-way risk, we were confused, what is that about? a final question, september or december, where are we at? anastasia: i am in the september camp. i think we are in for september. matt will stay with us. a route in u.s. media stocks. we talk about that in about two minutes time. fort so super thursday
the second day in the biggest selloff since 2008. more than $60 billion of value was lost. sending by, quite a few losers on that board. >> we are certainly talking about losers. it was sparked by disappointing results from disney after the close of trade on tuesday. that spread to other media companies. you can see them here, quarterly reports from cbs to 21st century fox to viacom showed not only shrinking ad sales, but the fact that profits were propped up by stock buybacks. index fell media 8.2% in just two days. that was the biggest slump since 2008. you can see that staggering drop, that erased all of the
gains in this year for an index that is posted annualized returns and more than 33%. these stocks have not just been high-performing, but the rest of the u.s. bull market. $650 billion market cap, that is what we are talking about. since tuesday, that value and started to evaporate almost $50 billion it raised from just five stocks. warner,ing disney, time comcast. that was its biggest drop since october, 2008. jonathan: thank you very much. anastasia, don't quite understand this, everyone saw
this coming. a wake-up call, we have talked about it for months. you go towards the netflix is, why the wake-up call now? anastasia: the must've been something in the earnings report that suggested that the growth the stocks will have will not be what it has in the past. it is not the same question about energy. why did we suddenly wake up? you just do, and that is the trigger. a lot of those stocks were in a pretty favorable position -- ir providers. content that are so many distribution channels. those channels succeed at providing original content, that this how they can get paid. jonathan: what the you think? what is the story for europe? we've had huge consolidation, what does the story? matt: the european stocks sold
off as well. we may have seen this coming, but the story in europe has been about the domestic recovery driving earnings. look, it is inevitable. present over the top threats, but bring in some important points, content will be very specific. they might protect them from some of the english-speaking confident over the top threats. of course, there is different regulation each year as well as north america. it is not as easy to say what happens in the u.s. will happen to itv. it is not that simple, but it is a big threat that markets are taking seriously. jonathan: you mentioned the oil conversation, economists all said this is great retail sales will pick up. it did not happen. it did happen, a bit of a
disconnect, does that continue? anastasia: it is difficult to get excited about stocks unless you are investing in refiners because what is happening is definitely low for longer. it will range here, if that is the case, it is not favorable for a lot of the energy companies. but it is favorable for 86% of the world, because that is the world gdp that benefits from lower oil prices. i would said the conversation about retail sales, yes, lower gasoline prices helped, but there is one catalyst we're missing -- higher wages. when you get that together, that is when you get that pop. jonathan: one stock we're missing is apple. we have had a correction.
you look at that specific,'t get too but is it something they go than just an apple story? anastasia: there has been a surprising slowdown in semiconductor sales. often we look at that as a potential canary in a coal mine situation. there might not be an exciting enough innovation. so consumers do not get excited. i think it is a positive one out a full rollover. jonathan: as an equity investor, where do you stand on what is happening? matt: we don't own it today. i think it is more simple.
you have to have a different view on the earnings potential. you talk about why this issue, markets are generally pretty inefficient. they get it right sometimes, wrong others. apple is one of the more efficiently valued stocks. you have to believe you will see significant earnings upgrades driven clearly by new products. investors don't see that right now which is why the stocks are following. jonathan: i want to bring the fed back into the conversation. a friend of mine said to be a chart of the dollar, and the dollar sells off whenn the rate hikes. how do equities react? if i am looking into investing in u.s. stocks is it sell or buy? buy.asia: we think it is a the confirmation from the fed is
that the u.s. economy is healthy enough. what stocks matter is that rates are rising ever so slowly. about 1% by the end of the year which is very shallow and good for stocks. jonathan: coming up, the only thing super about yesterday was the bridge. investors expect the bank of england to take a big step towards raising rates. we break down the super thursday after the break. ♪
jonathan: good morningjonathan: and welcome back to bloomberg tv. i am jonathan ferro live. 30 minutes into the trading day. the 2100 down a little. a points lower. the dax in. board, and mood checkout -- switch up the board. a weaker pound this morning. by $1.10.r it down seven straight weeks. the worst week since 2004. rent crude heading for a sixth
straight week of losses. barrel.ough $50 a brent up one full percent. let's get these top stock stories. caroline: i am kicking off with william helm. up by 4%. this is a company that is facing tax headwinds. this is a company that is just given us its earnings. their revenue is unchanged. was a gamblingds duty they faced. good operational progress, but tax headwinds. being able to build themselves up in the digital arena. buying a 30% stake in neo-games.
they've got the option to buy the whole thing. william hill currently trading on top of those earnings. this is all about russia, up by 4% this morning. this is a company that is suffering. they are seeing a marked slowdown in russia. they are downgrading the outlook for 2015 on the weaker economic situation in russia. will decline slightly. let's end on oil and gas. outperformingr, as we see a pickup in oil prices. 7.5%.ill is up technical that oil -- indicators. schumer he is a new york democrat, in fact many
feel he could be the party's next leader, he is saying he will break with obama and vote against the nuclear deal in iran. wholeices are lifting the of europe. jonathan: sterling was heading the other way, heading lower. the bank of england super thursday data shows one member voting to increase interest rates. here is mark carney at the news conference in 90 seconds. >> at the meeting yesterday, the mpc voted a majority to maintain the bank rate at 9.5%. they voted unanimously to maintain. it reaffirmed its expectation that when the rate rises occur they can expect it to be limited. near-term outlook for inflation
is muted. the fall and energy prices will continue to bear down on inflation, at least until the middle of next year. nonetheless, a range of measures suggest that medium-term expectations remain accurate. appreciated 3.5% since may. but he percent since march 2013. the drag on import prices will continue to push down on inflation for some time to come. building a downside risk for its near-term path. as the u.k. expansion progresses, speculation about the timing of the first move and bank rates increasing. this is understandable, and a welcome to sign for an economy that is returning. the likely timing of the first bank rate increase is drawing
closer. however, the exact timing for the first move cannot be predicted in advance. the music there is just as depressing as the news conference. jimmy, you probably could've -- jamie, you probably could've skipped the news conference. you got it right yesterday. jamie: we were more cautious. wrong. many others were is theng to take away split is not that important, because we know it is going to be raised shortly anyway. i think the market will not be paying too much attention to that. ginny murray, thank you very much. jpmorgan.amoroso with
in matthew beesley is still with us. matt, you go through the inflation report, you push up the gdp forecast. did we get too excited about what the bank of england may do? that is something coming soon. it is going to be data dependent did i continue, the data does not more to it. for the u.k. economy, the moves have bearable great wages. they're going to be more expensive, if you cannot afford a more -- if you can afford a higher mortgage rate -- jonathan: the risk is when you try to get the market to tie off when it matters, -- that is a
risk in itself. going forward, a lot of people sit here on the side of the atlantic and say the guys will do nothing until a group of individuals decide to do something. is that the perspective? anastasia: the fed is going to move. currency in my mind has everything to do with it. weyou look at currency, would love to have the wage growth that you guys had. we would love to have the productivity growth. that is not what we have in the united states. for many reasons, the u.k. should move before the fed's, but currently has anything to do with it. the u.s. is not as well dependent as the u.k. is on the sterling. jonathan: is that the story now? yesterday, it was striking, pound for pound. persistent sterling strength. that seem to be the objective
yesterday. -- that seemed to be the objective yesterday. medical globally there is a desire for countries to keep their currency mode. it helps on the export side of things. how fragile economic recovery czar around the world. i would argue the u.k. is one of the least fragile in the developed world. it is a concern that sterling will slow down the export. the other half of the debate that carney is having with the gdp. jonathan: we watch that is conference and look at the forecast, as you say the 2.4 test -- the wage growth predicted as well. unemployment down. emergency rates. you cannot reconcile those two things, can you? anastasia: mark there isill believes
slack in the economy. slack is being diminished and it's gotten a lot closer. nevertheless, it if you have a gradual path of interest rates, that would start diminishing that slack. accessingmatt, ubs their forecast yesterday, putting out the first hike. no fireworks. in november, potentially february, with the think? i don't think we need to take a view on when that rate rise comes. valuations are not limited to the owning -- limited to own and those stocks. -- two owning those stocks. we know the rate rises coming at some point. i don't think it changes your view on equities. beesley, headhew
jonathan: good morning and welcome back to bloomberg tv. i am jonathan ferro live from the city of london. message up to speed. german production unexpectedly dropped in june. 5.02% in after rising may. while imports% dropped 0.5%. the bank of japan says governor kuroda -- the boj will continue to spend test will continue to expand the money base. beate's biggest insurer estimates with second-quarter profits up 15%. the company is house by earnings from the property and cash division. bloomberg spoke to the cfo early today about the results. he highlighted how high interest rates would affect results. ask the interest rates are based
on a level that we had in december before christmas. therefore, they are still in line with our expectations. before higher interest rates -- earnings, bonds rates are still quite a bit. jonathan: the iranian deal hits a roadblock. democrat, chuck schumer announces opposition to the deal. to statement caused oil decline. let's get more from will kennedy. well, breakdown the statement of chuck schumer. this for me was a little bit of news and u.s. politics. a roadblock, yes. is a big enough to stop the deal? will: it creates a momentum
against the deal in the u.s. congress. stop barrelsll from coming on the market? i am not sure. i think it is looking for any reason to pop up. the iranian supply in the prospect of more supply coming into the market, any reason to be bullish, apart from maybe the reason everyone else's bearish? will: it's really taken handing down. down since june. when you look at the fundamental market, it is still not looking very good. we had a report this week saying there's probably 2 million barrels a day to many coming into the market. jonathan: it will matter to the refiners and it will matter to crude. pricing gets thrown around a lot. talk to me about the seasonality.
-- it is come into the a bearish time. after the summer, when every one is driving -- everyone is driving, you take a pause and reconfigure a finery. it is a reason to not be very bullish. jonathan: we talk about the destruction to future supply. something that has been flagged in the last couple of weeks is crude futures going all the way up to 2020, we are coming lower. maybe that is a big change in the last month. will: i think it is absolutely right. we have seen the england market thinking about a rebound. i'm thinking about the ceo of shell. goldman sachs as well, the change of review about how long this will go on for. nursing more people who are worried that this -- the price stays lower for longer. jonathan: thank you for joining us this morning.
crude back below $50 a barrel. we wrap up the week that was with charts that matter. versust was donald trump the rest of the route -- rest of the republican candidates during the debate last night. take a listen. >> is there anyone who is unwilling tonight to pledge your support to the eventual nominee of the republican party? and pledge to not run an independent campaign against that person? again, i am looking for you to raise your hand now? raise your hand now if you will not make that place tonight. >> mr. trump. ♪
jonathan: looking back to bloomberg tv. i am jonathan ferro. live from the city of london. it is time to catch up for markets. wrap it up with some of the charts. first, the athens stock exchange opened up on monday, investors started selling. the worst decline since 1987. perea's bank only halted by the daily limit curve. the bank was down 51%. by thursday, it has lunch 63%. -- it has -- it had plunged 63%. apple loses its shine. falling more than 10%.
drop has investors fretting. morgan stanley says the threats that says the fret is overblown. the not so super thursday. voted 821. the most in two weeks, following the decision against the dollar. the bank of england will like behind the federal reserve when it comes to hiking interest rates. there are the charts that matter. it is five months until the first presidential nominating contest and i want. last night, the contenders for the u.s. president lined up in front of cameras for their first debate. this is meant donald trump managed to get the first and last word. here he is on the subject of immigration. >> we need to build a wall, and it has to be built quickly.
a bigt mind having beautiful door in that walls so that people can come into this country legally. we need jet to build a wall. -- we need jeb but to build a wall. jonathan: it does not resonate in the same way as can down this wall. to get the take on this, i'm going to bring in a former white house correspondent, hans nichols. he was watching. is that a threat? hans: it is a very clear threat. it changes how the debate will move forward. ontoump continues to hold this possibility that he will run as a third-party candidate. they all will be taking shots. the donor class, the established
republicans, they are going to get concerned about what a third-party can -- third-party candidacy will mean. listen to how he repeated some of his service attacks on immigrants. >> our leaders are stupid, our politicians are stupid. the mexican government is much smarter, much sharper, much more cutting, and they send the bad ones over, as they don't want to pay for them. and want to take care of them. why should they? when the stupid leaders of the united states will do it for them. that is what is happening whether you like it or not. the rhetoric of the statement is very clear. there is a great undercurrent for the concern about immigration. whoever taps into that good when the nomination. the question is d do that at the risk of losing the general election. some ways it is like 2012 and 2008. will there be a
hispanic-friendly candidate? jonathan: and sitting here, maybe we've got some viewers setting in frankfurt, watching this it is august 2015. what is going on yet go by is the presidential race starting now? what do i have to look out for? hans: look at how the candidates try to shift their attention toward attacking hillary clinton. marco rubio did pretty well. he seemed to make that pretty well. listen to how he did it. >> this election cannot be a resume competition. -- if thison election is a resume come petition, hillary clinton will be the next president. here is what the selection should be about, the future and past. it better be about the issues our nation is facing. not issues we once faced. republicans are able to focus their criticisms
on hillary clinton or joe biden, that is a better opportunity for them. what you saw was a lot of in-fighting. it is important to know there is no major gas committed. it did not fundamentally alter the race, as set -- except for two wake up the republican establishment. donald trump is for real here he is not going away. if he does go away, he could be a bigger problem here at -- bigger problem. jonathan: coming up, let's take a look at what you should be watching on the day and hours ahead. the only data that matters is the job data out of the united states. we get the unemployment rate at 1:30 this afternoon u.k. time. we will be searching for the meaning in the numbers. coming up, the pulse with francine lacqua. excited perhaps. what you expect? francine: what is your forecast? 200,000.ays above
francine: i think it is going to be better than expected. we are going to look at u.s. jobs. where going to pit them against what we saw against -- what we saw with the bank of england. we are not doing too badly here. in the states, they have a problem. we will look at wage growth. what i really want to talk about his donald trump. jonathan: you're going to do just that with hans nichols. keep it right here on bloomberg tv. that is it for me. i'm looking at equity markets, down 10.1%. we are in the red in europe. if you want to talk about these markets, i am on twitter. best of luck for the rest of your day. have a great weekend here it -- have a great weekend. ♪
francine: jobs day. usa releases its labor report before the federal reserve septum or meeting. media meltdown. disappointing earnings from viacom sparked the biggest selloff for the sector since 2008. >> our leaders are stupid. our politicians are stupid. the mexican government is much smarter, much sharper, much more cutting. francine: and billionaire businessman causes more customer she as he dominates the first republican debate. ♪